The Importance of Umbrella Insurance? One Word – Motorcycles!

Okay, this is a subject that won’t appeal to many – but it should. It’s not just about insurance, it’s about protecting yourself, your family and your assets.

Let’s say you’re traveling down the road at a reasonable rate of speed. You check your rear view mirror, then your side view mirror, and seeing no obstructions, you make a lane change. THUMP!! What was that sound??

You check your side view mirror again to see that a motorcyclist was in your blind spot and you’ve just knocked him off of his motorcycle and he’s laying in the road. A truly sickening feeling.

Now the focus of this post is not to admonish the driver for failure to physically turn his head to assure there are no vehicles in his blind spot after checking his mirrors. This was accidental, albeit, avoidable. As the bumpstickers state: “WATCH OUT FOR MOTORCYCLES”.

The point is, this is now a very serious personal injury accident. At any given time, we have a good number of personal injury clients who were riding their motorcycle and involved in a collision. Because this isn’t a case of metal vs. metal as in typical car crashes, but metal vs. flesh, the medical bills associated with a cycle crash are usually astronomical in comparison.

Between an ambulance ride to the emergency room, the multiple diagnostic tests to determine the extent of injuries, the surgeries to set broken bones, the possible spinal surgeries, the closed head trauma for organic brain damages, the lost wages while recuperating, etc., the bills and economic losses are typically many times higher than $100,000.

Given that motorcycles are largely uninsurable, and chances are your maximum “bodily injury” car insurance limits are no higher than $100,000, a claim might be made against you and your insurance company with an eye towards your personal assets to satisfy the huge financial damages over and above your insurance limits.

Right about now the astute reader might begin to panic. In addition to ruining a perfectly good life, you’ve now placed your home, your investments and your assets at risk by this simple act of negligence.

Trust me, this happens many times every day. A driver is under-insured, is at fault in causing an accident and now is concerned that the injured party is coming after them personally. There is a simple solution, however, and it’s in the form of Umbrella Insurance.

Umbrella insurance is basically a form of catastrophic insurance. Nine times out of ten the $100,000 bodily injury limits you may carry on your car insurance is just fine. By the way, if you have the maximum limits of liability it is most likely $100,000. If your limits of liability are less, you’re even more at risk.

For those of us who want to protect ourselves from the one-in-ten personal injury situation, you can ask your insurance agent for umbrella coverage. Typically, this insurance will have limits of $500,000, $1 million or even $3 million in additional coverage over and above your original limits of $100,000.

Umbrella coverage will only kick in for personal injury claims once your car insurance limits have been exhausted. The very good news is, because the risk of a million dollar claim is much more remote than the claims of $100,000 or less, the cost of umbrella insurance is reasonable. Typically, a $1 million umbrella policy is $500 or less.

So, let’s consider this: For $500 a year I can insulate my family, my home and my assets from claims against my personal effects. If you have accumulated assets over the course of your adult life and you treasure that nest egg you’re building towards retirement, then protect it.

And always, always turn your head when changing lanes. Don’t rely strictly on your mirrors. Watch out for motorcycles.

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